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Burlingame's older housing stock and teardown culture create strong demand for construction financing. Many buyers purchase dated homes in prime locations and rebuild entirely.
San Mateo County construction costs run high due to labor shortages and permit complexity. Budget $400-600 per square foot for quality work, plus 6-12 months for approvals.
Most construction loans convert to permanent mortgages once the build completes. This single-close structure saves time and avoids refinancing costs after construction wraps.
Lenders require 680+ credit and 20-25% down for construction financing. They scrutinize contractor licenses, detailed build plans, and your financial reserves to cover overruns.
You need reserves covering 6-12 months of the construction loan payment plus your current housing. Lenders want proof you can handle delays without defaulting.
Self-employed borrowers face tougher documentation standards. Expect two years of tax returns, P&Ls, and sometimes a larger down payment to offset income complexity.
Regional banks dominate construction lending in San Mateo County. They understand local permit quirks and have relationships with the building departments that matter.
Draw schedules vary wildly between lenders. Some release funds in five stages, others do seven. More draws mean less cash out of pocket but more inspections and fees.
Interest-only payments during construction keep your monthly burn low. The loan converts to principal and interest once you get your certificate of occupancy.
Build a 10% contingency into your budget minimum. Burlingame projects always hit surprises: bad soil, outdated utility connections, or design changes mid-construction.
Lock your permanent mortgage rate at closing if possible. Rates could jump during your 9-12 month build, and a locked rate protects against that risk.
Choose your contractor before shopping lenders. Some lenders have approved contractor lists or won't work with builders lacking track records in premium markets.
Hard money loans fund faster but cost more. Use them for quick teardown purchases, then refinance into construction financing once you have approved plans.
Bridge loans work if you need to buy the lot while selling your current home. They cover the gap but require construction financing to follow.
Jumbo construction loans apply when your finished home value exceeds conforming limits. Burlingame builds often hit this threshold given land and construction costs.
Burlingame permits move slower than neighboring cities. Plan for 6-9 months from application to approval, longer if your project needs design review board sign-off.
Hillsborough border properties face stricter setback and height restrictions. These rules affect buildable square footage and force design compromises that impact costs.
School district boundaries matter for resale value. Homes in top-rated elementary zones justify higher construction budgets because finished values support the investment.
Expect 20-25% down for most construction loans. Lenders view ground-up builds as higher risk than purchasing existing homes, so larger equity requirements apply.
Some lenders allow owner-builders with construction experience and proper licensing. Most require licensed general contractors with track records in your area.
You cover overruns from personal funds or contingency reserves. Lenders rarely increase construction loans mid-project, so accurate initial budgeting matters.
Construction loan rates run 0.5-1% higher during the build phase. Once the loan converts to permanent financing, rates match standard mortgage pricing.
Most lenders require you to own the lot or close simultaneously. Some offer land acquisition rolled into construction loans for qualified borrowers.
Construction Loans in Burlingame